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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Us 15, Sec 9, Washington 8, Apple 7, Mandy 5, Angie 5, John Boehner 4, Geico 3, S&p 3, Jim 3, Jane Perez 3, Austin 3, Bloomington 2, Indiana 2, Virginia 2, Nancy Pelosi 2, United States 2, Unitedhealthcare 2, Mandy Drury 2, U.s. 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    December 7, 2012
    3:00 - 4:00pm EST  

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son. best buy sends her five. she tries to contact them. nobody responds. she actually then e-mailed the consumerist, which is a blog. they got in touch with best buy. what did best buy do? they let her keep all five ipads because she tried to do the right thing. that's a win for ethics. that's a lesson, too. thanks for watching "street signs." "closing bell," bill griffeth and mandy drury, is coming up next. and we do welcome you to "closing bell." yes, i'm bill griffeth here at the new york stock exchange. hey, mandy. >> i'm mandy drury standing in for maria bort row mow today. hello, everybody. the dow and s&p are looking to finish the week on a winning note despite the lack of progress in washington on the fiscal cliff. the nasdaq continues to be dragged down by apple. >> apple's had a tough week. we'll get into that coming up.
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we're still looking for a deal on capitol hill, surprise, surprise. all to keep us from going over the fiscal cliff. just in case, though, we've got some experts on happened to help you protect your money. here's how we stand right now, though. it's been a generally positive day for some of the blue chip averages. the dow among them. up 57 points right now, near the highs of the session at 13,003 and change. the nasdaq continues lower. you can blame apple. technology suffering as a result today, down 12 points right now at 2977. the s&p is up 2.25 points at 1416. with less than an hour to go in the trading week, another week without a deal to avoid going over the fiscal cliff. while today's positive jobs report did give markets a boost early on, it wasn't enough to get a significant rally going and to continue it on. so what's it going to take to get some conviction back in this market? >> that's in today's "closing
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bell" exchange. gentlemen, great to have you joining us here on "closing bell." i think bill pretty much cede it. what is it going to take to get conviction back in this market? i kind of know the answer, but i want to hear you guys say it. give it a crack, jim. >> clarity. i think some kind of clarity as to what tax rates are going to be in a mere 3 1/2 weeks. so that we can start is making some kind of plan. right now the market's on hold. we're all waiting. >> do we need just a plan, or does it have to be a good plan, jim? >> i think a good plan would obviously be a better plan. a good plan would be less taxes going up than more taxes going up. at this point, even a bad plan might be better than no plan. >> austin, it's clear from this jobs report the economy is stuck in second gear. what's it going to take to get to a higher gear right now, do you think? >> i think we got to get the growth rate up in the economy. certainly europe's not any help. what's happening in china and
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japan is not any help. then you add on top of it what's coming out of washington. i don't think you should get your hopes up about figuring it out before the end of this year. i think there's a pretty deept chance we go over the cliff and then try to sort it out in the beginning of the year. >> lovely. >> joe, when did 146,000 jobs become good? have we become so pessimistic -- have our expectations come so low we're cheering 146,000 when we should be well over 200? >> plus the downward revisions for the previous two months. >> although, those revisions were almost all in government. mandy makes a good point. 150,000 a month, which has been the average over the past is a months or so, is not great. if this was a normal recovery, we'd be growing at 4% instead of 2 on gdp. employment would be well over 250. however, the good news in today's report was if you look at the household survey, there was clearly a hurricane effect in these numbers.
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we might actually have printed over 200 absent hurricane sandy. i would argue the trends is getting better. as jim pointed out, we need some clarity on the outlook, and the cliff is very important. if we go off the cliff, even if that number had been 250, the numbers still would weaken next year. >> jim, you have to make money in the meantime. where do you put your money? where are you putting money to work right now? >> well, i'm pessimistic. i share austin's view that i think we're going to go off the cliff and push this thing to february with the debt ceiling bill. as that reality comes in, the market is going to continue to struggle. i would avoid risky assets right now. i'd play something safe. play treasuries because you're not going to lose money on them. i'd play gold. i wouldn't be betting on that we're going to have a fix in place in the next 24 days that's going to lead to a big rebounds. >> all right. hang on one second, guys. we want to bring in and get your reaction to this rather surprising story that our phil
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lebeau has from illinois. you're finding a company that can't find people to apply for jobs out there. are people refusing jobs in this economy? >> it's happening, bill. listen, it's not just here. we're seeing it with a ton of manufacturers. take a look at how many manufacturing jobs have opened up in the u.s. over the last three years. it's gone from 90,000 to 247,000 in october. we went down to bloomfield, indiana, just south of bloomington. we talked to the folks there at an auto parts supplier. they cannot find people for job openings, particularly for the second and third shift. some of it's a skills gap. some of it is a lack of applicants. some of it is because they've had people, brought them in, hired them, and those people have said, you know what, i'd rather stay on unemployment. >> we've had people that we've interviewed that we've agreed to hire, and at the end of the day, they've turned around and said, we're not going to take that job. we just found out that
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unemployment benefits have been extended. they don't take the job. >> after we first reported this this morning, i got flooded with tweets and e-mails. people saying this is ridiculous. one person wrote, $13 an hour. that's what a lot of manufacturers are starting people out at. that's about $2,000 a month. or you could get $450 to $500 a month in unemployment. why would you work 40 hours a week for an extra. the bottom line is this. manufacturers are frustrated because they can't bring people in at $12, $13, or $14. because of that, they're losing productivity. they can't fill the second and third shift. they are losing orders because the demand is still there, but if they can't find the people to fill those jobs, they're out of luck. >> but phil, here's a question. if there's that much demand, at what point do wages start going up? at what point does there have to
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be an insentive from the employer's point of view? >> remember, it's a global market, mandy. a lot of them are saying, $13 to begin as an apprentice or beginning in a manufacturing plant and working up to $29 an hour, which many of the people here make, that's reasonable in the eyes of many manufacturers. every company is going to be different. $13 an hour in their opinion, that's competitive on a global basis. >> now, austin, this is the kind of story anecdotely that's going to have some lawmakers tearing their hair out. >> look, i agree with that. i think it's highly questionable to try to generalize from what one guy said outside of bloomington, indiana, to the national labor market. the national data do not back that up in the slightest way. there's still five unemployed people per vacancy. the overwhelming factor in the job market is not the skills
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gap. it's that's there's not enough demand for the products these guys are making. >> austin, i want to correct you on one thing. as you know, if you look at the ratio of drop openings to unemployment, it has clearly shifted outward and to the right. >> meaning what? >> meaning there is a major skill mismatch in this economy. even chairman bernanke hinted that the in a speech two weeks ago. i don't think we can down play this mismatch. it's for real. >> in other words, not enough skilled workers. >> for all jobs. >> aurks i want to bring up a policy question. to joe's point, maybe the programs that have been put in place -- when you think about the money, the stimulus, everything that's gone into trying to make this recovery real in the economy and get jobs created, and we're still at this stage. i mean, maybe the programs that were put in place weren't right. maybe they should have been more skill matching programs. >> if by that you're saying unemployment insurance, that's a
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complete misnomer. first of all, you can't get unemployment benefits unless you're actively looking for work. if the people at the unemployment benefits office find out you were offered a job and you're turning it down, you lose your benefits. i think that part of the story would bear a little more scrutiny rather than just taking it face value. the second is most of the unemployment benefits certainly at the state level and many at federal level are wearing off. i mean, what we've got, a major problem, is that many millions of people have dropped out of the labor force as the unemployment benefits wore off and they can't find jobs. i think to suggest that really there's not a job shortage in the country, it's all just laziness on the part of the unemployed. it's totally ridiculous. >> no, no. i wasn't with suggesting that at all. i was maybe suggesting that because so many employers we talk to here say we have the positions, we just can't find the people with the right skills
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is. >> you can see that in the fed's beige book. >> the vacancy rate in the united states is the lowest on record. now, the data begins around 2000. we don't have a long series. you can call it the beverage curve or whatever you want. there are skilled job openings. those job openings do not come anywhere close to match the magnitude of the problem of coming out of this recession. two years from now, the skills gap may be the main driver of unemployment. as of right now at the ends of 2012, not at all. >> all right. gentlemen, we've got to go. thank you for your thoughts. phil, thank you for the report. >> good debate, guys. thank you very much. we got about 50 minutes go to g before the closing bell. the dow is positive. the s&p is positive. the nasdaq has been dragging its feet because apple is down. >> you might want to think twice before complaining on the internet. someone who ripped their
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contractor on yelp is now being pseu sued for nearly $1 million. that contractor is here coming up next. also, apple is having its worst week in 2 1/2 years. is there something wrong inside the company? what's really behind the stock drop? we're going to take a bite out of apple just ahead. also, your 401(k) may be changing. a troubling new trend may be spreading. we'll tell you what it is and how it will affect your retirement. stay with us on close close.
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here's a story for all of us to pay attention to. think twice about posting negative reviews about a business on the internet because it could land you in court
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depending on what you say. it's what happened to jane perez. she criticized work a contractor did on her townhouse and suggested some valuables were missing as a result. here are some photos of what she describes as botched home repairs by the contractor whose name is chris deets. >> last month the contractor fired back with a $700,000 defamation lawsuit. this week a judge ordered some of those allegations to be taken down. the court still must decide whether there are grounds for a defamation case. chris is the contractor and joins us now to make his case. we were also supposed to hear from jane, who decided last minute not to appear on our show. i want to put this to you point-blank. this lawsuit has actually prompted even more negative reviews from some who say they wouldn't hire a contractor who sues his clients, so don't you feel maybe you're shooting
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yourself in the foot? >> no, the majority of those false comments or negative comments are coming from certain groups, public groups out there that are out there to simply suppress my lawsuit concerning what they think that i'm suppressing public opinion or free speech. >> wait a minute, you're saying this is a campaign against you? >> there have been comments that have referenced certain groups out there, one being a very well-known group, saying hey, we want free speech across the board, and let's make mr. deets pay for that. >> has that created negative publicity for your company to the point where you are lost work? >> without a doubt. but i'm fighting on principals, morals, justice, and truth. it's a matter that she accused me of shotty work. when she calls me a criminal, stealing thief and a trespasser, that's illegal. >> so the judge had her take that down, the reference to
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stolen jewelry. >> only on yelp. >> but a reference to a previous lawsuit that had been filed that used what the judge said was incorrect terminology. that's gone now. what's left are just complaints about the quality of the work. are you going to drop the suit as a result? >> i will not drop the suit. she created damage for the last -- >> on what grounds do you base the suit if she's merely complaining about the quality of the work you did? >> up until two days ago, those postings kept grow and growing by jane perez. she kept adding negative and negative comments accusing me of being investigated and sued by the attorney general of virginia, being investigated bit better business bureau, by dpor of virginia. those are all false accusations. you can't call me a trespasser, criminal, jewel thief, being investigated by the police and get away with it. there have been to be repurr percussions. >> what would it take for you to drop the suit? >> money, apology, and removal
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of those posts. and for yelp and angie's list to stop hiding behind 230-cda. >> you're saying jane is behind some of these other posts that have been put on here -- >> no, i'm not saying that. there's organizations -- i really prefer not to open up a can of worms, but there's certain organizations that make sure they make as much of a noise as possible for free speech and suppression of somebody who they believe is blocking free speech. i'm for free speech. i want them to have their opinions. they can voice negative or positive opinions. what they can't do out there, including ms. perez, is accuse individuals of being criminals. >> i get that. i get it when you're being accused of criminal conduct. that's been removed now. >> no, it has not. >> well, the judge just ruled that it has to be removed. >> if you go to angie's list, it's still up there. everybody keeps pointing at yelp. this is related to yelp and angie's list.
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the entire posting is still there. >> the cynics might say, chris, people post negative stuff all the time on the web, right? this is what the net saw about. unfortunately, people can basically just mouth off and say what they like. >> you're right. >> do you feel you're taking it too far? >> no, because let me give a quick synopsis of this in a nutshell. the first process was she didn't pay me any money. she was happy with the work. she added work to the process. i said, look, you haven't paid me anything. can i get some type of payment? she said i'll get back to you. >> how much does she owe you? >> the original contract was $9,000. she didn't pay me anything. she said, i'll get you a check tomorrow. the next day she fires me saying there's jewelry missing. i don't get any payment. i asked her for payment. she doesn't do it. we go to court. it gets dismissed on some procedural errors on my part. >> you went to small claims court? >> that's correct. i represented myself, which i
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shouldn't have done. i didn't time the bill of particulars on time. i should have. nonetheless, that was an expensive business lesson. i learned my lesson. what happened next is after she did that, she then went online and put all these negative postings. i was fine with that until she accused me of being criminal. i went to angie's list and to yelp. i said, how do i get these removed? by court order or the poster removes it. i have legal documentation that jane perez references in her postings calling me a criminal, stating that her accusations are false. i submit them in e-mail to yelp. i submit them in e-mail to angie's list. they say that's not sufficient. i had no other option but to take legal action. >> all right. very good. again, we wish jane decided to join us. she decided for whatever reason at the last minute not to. frankly, chris, i'm surprised you're with us here because this thing hasn't been settled yet. it's still being litigated as we speak. >> yes, but it's very important.
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i appreciate your time. >> thank you for coming on, chris. >> again, a lesson for all of us to be careful what you put online when you're complaining. >> absolutely. you might have a fake name or a fake avatar or whatever. you'll be found if you do something bad. thank you, chris. okay. back to the markets. let's look at what's going on. the dow is up by 53 points right now. >> meantime, though, a terrible week for apple shareholders. how did this had darling of the market suddenly become such a dog? is the worst over? we'll try and look for some answers on that coming up next. also, later on, did you hear john boehner today? >> four days ago we offered a serious proposal based on testimony of president clinton's former chief of staff. since then, there's been to counteroffer from the white house. instead, reports indicate that
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the president has adopted a deliberate strategy to slow walk our economy right to the edge of the fiscal cliff. >> former presidential candidate and vermont governor howard dean says bring it on. going over the fiscal cliff will actually help america. he's going to make his case, very bold statement there, to someone whose company will be decimated by the spending cuts to defense companies. you do not want to miss this confrontation. ricans are alwayso work hard for a better future. since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
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pretty clear apple stock is having its worst week in more than two years. let's get to bertha coombs with the details. >> tough end of the week ear. it's apple's horrible, awful week. today's decline saw shares hit a real technical weak point, the so-called death cross. that's where the 50-day moving average, the top line in yellow, crossed below the orange line. that's the 200-day moving average. according to the spoke investment group, the last time that happened in september 2008, shares didn't bottom until january of 2009. it kept crossing that technical weak point. apple is on track for its worst one-week decline since may of 2010 when it fell over 9.5%.
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right now, just off 9%. concerns this week, iphone demand, overall margins, concerns about more competition on tablets, and more concerns about tax selling ahead of the fiscal cliff. still, shares are up 32% year to date. the stock now on track to be down for the ninth week in the last 11. on average, though, when apple has hit that death cross, shares have gained about 1.1% the following week. apple, bill, the reason that the nasdaq is the big underperformer this week. if apple had been added to the dow instead of united health earlier this year, we would have seen a 700-point decline for this pullback in apple. >> we would have been much higher in the dow than we are now. thanks, bertha. what's to do with apple? is it a buy? do you avoid it? let's talk numbers on this
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today. what to do with this dreaded death cross? >> bill, a lot of clients of phoenix partners are calling in and saying, you know, what do i do now? is this the time to buy apple? my answer is simply, no, no, no. this is not the time to buy. lefts look at a longer term chart. what i want to point to is the nice, healthy, steady increase in price from 2009. all of the sudden, you know, greed takes over. the stock rallies. it moves parabolic. everyone loved to love this stock. now everybody loves to hate this stock. i don't think this fear has left the market. i still think that we have some more downside room. >> john, have you given up yet? >> no, not at all. in fact, i think it's the time to buy, buy, buy. i'll tell you why. if you look back over several years, when the multiple hits ten times, which is where it is right now, this stock rallies and rallies strongly. i think, you know, it's cheap relative to the market at 13
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times. it's cheap relative to ibm and oracle and other high-quality tech peers. this is an unbelievable company. unbelievable suite of products. yes, the concerns about margin are out there, but they're overblowing it. i think now is a great time to buy. certainly around the 530 would be good support for this stock. >> john, right now apple is not trading off of fundamentals. the story is about the chart. this chart is break down. bertha mentioned right before we came on about the death cross. my team today, we looked at death cross. am experienced the death cross 21 times since 1984. we ran some forward returns and found over the next 5, 10, and 20 days apple has weakness. we don't see science of positive returns until 40 days. that's two months from now wekds positive returns on average. i think we have lower to go here. >> actually, i think you have fairly good seasonal strength in december and january through
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iphone sales. i think that's run with of the big catalysts for the company. you've got this product. you recently signed an agreement with sprint. you have t-mobile coming in next year. you have the carriers lining up and starting to sign. only two years ago you had one carrier, at&t. now you have four coming up. because it's been in decline so much, this is a good time to, you know, buy. maybe get a couple dollars cheaper. >> good conversation, guys. you both made good cases right now on a stock that everybody is watching these days. thanks for joining us. appreciate it very much. >> thank you. >> okay. we're in countdown mode. about half an hour away before we close up for the trading week. we're still holding on the dow. it's up about 52 points right now. the nasdaq is still dragging its feet compared to the other two indices. and then the fiscal cliff follies continue. >> this isn't a progress report
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because there's no problem to report. >> i'm just going to say it. it's a mess. someone here says it will stay a mess until we shift the discussion from tax hikes to spending cuts. we're going to take a look at the real issues impacting our debt and deficit coming up next. and as bad as john boehner made it sound, how come the markets seem to be trading like we are going to have a deal? what does wall street know that we don't? tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime. tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. tdd#: 1-800-345-2550 and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, tdd#: 1-800-345-2550 and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-866-294-5412.
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there's that word, absolute. is it an absolute fiasco? time for our daily visit with eamon javers, who living this rolling calamity in washington every day. where are we now? >> absolutely, bill. it's a little bit of a problem
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here in washington. let me start with what we do know. we don't know a whole heck of a lot here. what we know is the democratic house leader nancy pelosi went down to the white house today for a one-on-one meeting with president barack obama. we don't know what they said, and we're in the era now of parsing every single word they do say publicly. nancy pelosi was out before cameras, although it's hard to get a lot of indication of what's going on with had statement. take a listen. >> the only obstacle standing in the way of middle income tax relief are the republicans unwillingness to ask the top 2% to pay their fair share. >> and if you listened carefully to speaker john boehner, he did say that there was no progress to report, but he may have been hinting a little bit of where there's some room for a deal here if the president will just meet him maybe not even halfway. listen to the speaker. >> there are a lot of things that are possible to put the revenue the president seeks on the table, but none of it's
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going to be possible. the president insists on his position, insists on my way or the highway. that's not the way to get to an agreement. >> so where are we now? i think we're basically at a point where speaker boehner might be willing to cave a little bit here, but he needs something from the president. he needs something to go back to his conference with and say, look, we're going to declare victory on this and let's move on to the new year and get this political monkey off our back. you can kind of smell a deal gelling here in washington behind the scenes. maybe not until after christmas because they're going to both want to be able to tell their political base that they fought as hard as they could as long as they could. >> i have one word for them. it's compromise. thank you very much for that, eamon. >> it's a lost art. >> exactly. well, as the battle is raging on in washington, an argument of
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raising tax on the wealthy is taken to the streets. peter says taxing the wealthy simply will not work. the attention should be on spending cuts. >> but richard brodsky says he's got it wrong. both joins us no hash it out. richard, what about that? it's a fair question. we so much focus on the revenue side of this argument, the tax increases or whatever it going to come out of that deal. the discussion hasn't really gone to the spending side so much. >> look, peter has a political loser in the sense that the president suspect going to agree to that. he's also got a bad economic argument. we have run out of supply-side economics as a model for how to fix this economy. we need to put $1,000 in the hands of 100 families rather than $100,000 in the hands of one family. you got to stimulate the man by putting cash in the hands of people who are going to buy things. when we tax the rich, we do not really affect the demand side. supply side is over.
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the president knows it. people in the united states know it. peter hasn't figured it out yet. >> peter, do you care to rebuff? >> of course he does. >> first of all, it's supply that created demand. just printing money and giving it to the middle class so they can spend it isn't going to create economic growth. we needs purchasing power and productivity. raising taxes on the top 2 %, look, they're already paying more than their fair share. it's not going to solve the problem. we need to dramatically cut government spending. if we fail to do that, we're going to have to increase taxes dramatically on the middle class. the fiscal cliff is just a small down payment on paying the piper. we have to pay for all this government. the big mistake is growing government. >> although there's a room for balance, i don't say peter's wrong entirely, the fact of the matter is the top 2% are not paying their fair share. american people don't think so. the numbers don't add up. if you want a deal here, you're going to have to raise the rates
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and then if you want to talk about spending cuts, as i think the president will eventually do, you'll see a last-minute agreement. >> first of all, i'm in the top 2%. i'm paying 45% of my total income in income tacks boxes to state of connecticut and the government. >> you need a better accountant, peter. >> more than half of my income is going to go to the government. you tell me, what's fair about that? >> i'll tell you what's fair about that -- >> i'm paying half. excuse me. i don't care what the majority voted to do. they don't have a right to steal my money just because they vote for it. >> i'll tell you what the problem is. we're in a crisis. we're in a crisis caused by the bush policies, unfunded wars, tax cuts we couldn't afford, and we have to dig our way out. in the process, the president is saying that the wealthiest are most able to contribute to that. >> it's not going to dig us out
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just raising the taxes on the wealthy. >> it is not going to dig us out alone. >> it's a very, very small and minor drop in the ocean in the grand scheme. >> you know what the wealthy are going snoto do? they're going to invest more abroad. they're not going to employ as many people. >> they didn't do that when -- >> we have to go, guys. >> rich people are going to do what's right. >> yes, they will. >> we can go back to the clinton rates and eisenhower rates and raise substantial revenue. >> no, we didn't. that's the point. >> okay, gentlemen. we have to break it up here. we have to rise above. >> pencils down, everybody. i feel like we've risen above, don't you? i don't know. are we any closer now? i don't think so. >> do you feel any higher than you were before? >> but that in a nutshell is what's going on in washington right now as well. thank you, guys, for joining us.
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got to turn around because it's the only board i can see. still up 60 points on the dow as we head toward the close. >> gaining a little bit on where we were about half an hour ago. well, if the ceo tweets news or posts it on facebook, is it illegal? netflix is in hot water with the sec over a facebook post. passions are running really high on this issue on both sides. we got the former sec chairman next on what he thinks. also after the bell, ibm making big changes in its 401(k). this is significant. is there a trend forming that could hurt your retirement savings? we're going to find out from the experts how to protect your money still to come. o as you cas customer satisfaction is at 97%. mmmm tasty. and cut! very good. people are always asking me how we make these geico adverts. so we're taking you behind the scenes. this coffee cup, for example, is computer animated.
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well, the sec is taking a decidedly unfriendly view of executives using facebook and other social media to tout their firm's accomplishments. mary thompson, you have more. what's the latest? >> mandy, i spoke to a number of attorneys who say that by threatening netflix ceo reed hastings with charges, the sec is sending a strong warning that social media isn't the place to disclose material information.
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a professor at columbia law school believes hasting committed what he called a technical foot fault using his facebook page to trumpet netflix surpassing a monthly milestone of a million hours of viewing. it prompted the sec to ask if this was material information, information typically released through the sec to reach a broad audience. hastings maintains it wasn't material in any way disclosing it to his more than 200,000 facebook friends. but attorneys disagree. professor coffey noted facebook is mostly used by younger generations. also, hastings friends are his, not the companies. still, it's a fact more ceos are opting to use new, rather than traditional media to get the word out. so is experts say firms need rules in place on how to use
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social media and more important what to disclose on it. johnson also points occupant the sec needs to get on board an well and provide guidelines on how to use social media. >> all right, mary. thank you. let's talk to harvey pitt about this. he ran the sec from 2001 to 2003. does he think netflix broke the rules? he joins us now. good to see you. welcome back. >> good to be with you. >> here's the facebook post. it's kind of hard to read. in it, on that day in july 3rd, reed hastings wrote netflix crossed the 1 billion viewing hours mark in june for the first time ever. he revealed that for the first time on facebook. if you are running the sec, would you charge him with breaking the spirit of the fair disclosure rule? >> i would if reg fd were still in effect. i think reg fd is a silly rule and one that's counterproductive. as long as it's on the rule, it
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has to be obeyed and enforced. this is a violation of reg fd. >> do you -- >> so you would go after -- let's be clear. you would go after reed hastings here? you agree with what the sec is doing? >> well, we don't know yet what the sec will do. the staff has said they think there's enough here to recommend an action. but yes, i think that if you're going to make what is clearly a profound announcement and one that seems to have had market moving impact, you have to do that to the marketplace as a whole and not to 244,000 of your closest friends. >> it's become a little arbitrary, though, a little subjective as to what is profound, what is market moving. i know the stock did move up on the back of this, but reed hastings said he did in the believe that what he said was material. saying we've reached 1 billion viewers or 1 billion hours of viewing in june was not material
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to investors. is there a gray area here, harvey? >> there may be a gray area in some cases. i know that they cite a citigroup favorable report as being an impetus for the movement. but the stock went from approximately $67 a share to $81 a share, and the single most important event was this posting on facebook by hastings. it seems to me it was material. >> but here's the question, though. has the sec fallen behind on keeping up with social media? what constitutes a full disclosure? i mean, what does reed hastings or any ceo have to do to qualify for an announcement of some kind that then satisfies the cry tyrian for full disclosure. it could be argued reaching 245,000 people on facebook would be close to full disclosure.
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don't you agree? it did reach the market somehow. >> the market, unfortunately, is a lot larger. although, ll ll lly -- i will s. most sophisticated investors today follow blogs and facebook and twitter. they're looking for their news wherever they can find it. that said, notwithstanding, the goal here is to put out a public announcement. the company in effect compounded hastings' err. by his posting, he violated fd. the company could have cured it if the very next day it had filed an a 8k. the rule permits you to select a disclosure a day later. >> feels like it's opening a big can of worms. i have a feeling we'll say more cases like this. >> yes. i think there's a lot coming in
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this direction. >> okay. thank you very much. >> we're going higher. up 75 points right now. i was just talking to one of the traders. the bias was to the up side. we'll see if that holds as we head toward the close here with about 12 minutes left in the trading session. >> yeah, okay. and there are still a lot of negative head winds facing the market at the moment. yes, it continues to rise. why? we're going try and find some answers for kbroup. >> then our housing experts are here with a serious warning. they're going to reveal the risks face real estate because of the mess in washington. stay tuned. [ male announcer ] when gloria and her financial advisor made a retirement plan, they considered all her assets, even those held elsewhere, giving her the confidence to pursue all her goals. when you want a financial advisor who sees the whole picture, turn to us. wells fargo advisors. but when i was in an accident... turn to us. i was worried the health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. so i never missed a beat. that's health in numbers. unitedhealthcare.
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mixed day on wall street as we head toward the close. let's head to bertha coombs for a market flash. >> groupon certainly not a bargain today but stocks surging over 20% just today alone. traders have been saying there's more speculation about a potential sale of the company. lots of different things going on in chat rooms. a lot of the volume today -- twice the daily volume. take a look at the week. pretty good week, certainly
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compared to apple, which is down nearly 10%. groupon up 13% for the week. back to you. >> thank you, ma'am. john boehner said this morning it was a week that was wasted in the fiscal cliff discussions, but the market sure isn't trading that way. how come? >> good question. with us today is david darst. what do you reckon, david? how come? >> i think you got the four cs. you got consumer confidence. you've got the china situation looking a little better. you've got consumer credit looking better, mandy. finally, take liberty with that fourth c, house prices. they're hanging in there. that's been one thing. on the other hand, you have a deceleration going on this quarter, mandy. our best guess is it's going to come in at about 0.8%. first quarter, 0.9%. >> what are you talking about, gdp? >> on gdp. the second quarter, 1.2%.
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you're seeing a deceleration here. this is basically e quill librium. it's not just the fiscal cliff, mandy, that's causing the market to do this seesaw action. >> we highlighted yesterday how the german and french markets hit 52-week highs yesterday. we're not close to that. we hit our highs in september and haven't looked back. are we being held back by the fiscal cliff? >> just like business people, investors are waiting for signs of uncertainty to be lifted. so you have the fiscal cliff, and the business confidence is at an all-time low. consumer confidence is at a 4 1/2 year high. germany's stock market is up 25% this year, both in dollars and euros. the u.s. dollar and the euro are about the same. basically, you want to watch the ten-year treasury interest rate. it's been going down this week. you always show that at the end of the week. gold has basically been very quiet. you're waiting for the dough
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here. you're looking for the market to give you a sense of where the economy is going. >> we're waiting for green lights. do you feel when all is said and done, no matter how much we talk about, you know, how the end of the world would arrive if we went over the fiscal cliff, people in the market basically his surely they can't be that done. they're assuming it's going to get done. >> i think the markets are saying -- it's balanced 50/50. my personal opinion is it's a higher chance it won't happen. just as bill clinton managed to pin the blame for the government shutdown on newt gingrich and put the republicans in retreat, in terms of card playing, president obama has some cards that he can basically lay this off and perhaps it will fall to the blame -- fall on the republicans. that's why we think it could drift over the cliff. >> we'll see. i know you've been a champion of apple all year. we're going to ask you on the
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countdown if you'd still buy apple at these lower levels. that's still to come later. thank you, my friend. before we go to commercial here, some sad news for the business world and our family here at cnbc. saul steinberg, the father of our maria bartiromo, died earlier today at the age of 73. he was best known for launching a string of takeovers back in the 1980s. he was also an avid art collector and a major benefactor at the wharton school of business at the university of pennsylvania. he leaves behind a wife and five children, including maria's husband, our johnathan steinberg. our sincerest condolences to his family and friends and my dear friend maria, who is obviously with the family. saul steinberg, dead at the age of 73.
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specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. minute left. we're going out at the highs of the day. i want to focus for a moment on the stock of the week. we've all been watching the continued decline of apple. down another 3% today. 9% for the week. david, you at morgan stanley wealth management have been championing this stock. do you still like it? >> we still like it. we would accumulate shares here, especially if it gets below 500. three reason

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